Morrison, Colorado granted reprieve in Buy America challenge

A U.S. town that had run afoul of Buy American rules for using a bit of Canadian steel to repair a bridge is breathing a sigh of relief.

In order to not have to pay back some funding it received from the U.S. government to help pay for the bridge, Morrison, Colorado, was facing a bill of more than $30,000 to replace the Canadian steel with U.S.-made steel. Last week, it got word the Canadian part could stay.

Buy American provisions are aimed at ensuring transportation-infrastructure projects are built with products made in the U.S. The rules have been in place for more than 30 years, but the Canadian Manufacturers & Exporters, a lobby group, has raised concerns that the provisions have been creeping into legislation covering other areas.

Back in 2009, Buy American provisions used in the Obama Administration’s $800 billion stimulus package triggered a minor trade row between the Canada and the U.S. The dispute was only resolved in early 2010 when Washington granted Canada an exemption that expired in September 2011.

For Morrison, population 430, the problem began in February when an engineer discovered that steel used in a support piece for a bridge in the town was manufactured in Canada. Morrison had received a $59,000 federal grant for a $144,000 project to repair the old one-lane bridge.

The contractor had ordered the steel from Atlas Tube in Chicago, and it was rolled in the company’s factory in Canada, according to Morrison town administrator Kara Zabilansky.

“Nobody saw it was foreign until after it was installed on the bridge,” Ms. Zabilansky said in an interview.

She said the Federal Highway Administration informed the town it would have to replace the Canadian-made steel, which she estimated would have cost more than $30,000.

The agency’s guidelines allow an exception for foreign-made products under $2,500 but the Canadian steel in the Morrison bridge exceeded the limit by about $700, she said.

Last week, some eight months after the problem came to light, and almost a year after the bridge was repaired, Morrison was let off the hook. Ms. Zabilansky said the order for the Canadian steel will not be included in the contract.

Canada is pleased that the issue has been resolved satisfactorily, said a spokeswoman for Canadian Trade Minister Ed Fast.

“The situation in Morrison highlights how integrated the Canada-U.S. economies are and how difficult it is to segregate the North America supply chain,” spokeswoman Shannon Gutoskie said in an email. “Protectionism is bad policy and bad for businesses on both sides of the border.”

Martin Lavoie of the Canadian Manufacturers & Exporters also pointed out that, in this case, the Buy American rules designed to protect American companies hurt a U.S. company with a Canadian subsidiary.

Ms. Zabilansky said she could not speak for the Morrison town board about whether the town would seek federal funds for future projects. But she described the experience as “unpleasant.”

“It just seems very bureaucratic. For a $700 mistake, to spend $30,000 to fix it is not in the best interests of the people,” she said.